02/02/2011

Merlin's Technology Chief Heads for the Exit

Merlin Securities co-founder Amr Mohamed left the prime-brokerage firm last week.

Mohamed, who resigned Jan. 26, oversaw technology for Merlin, which has successfully competed against the Wall Street banks largely on the strength of its technology offerings. “He has been touted for years as the brains and the genius behind their great product,” said a prime-brokerage executive at a competing firm.

Mohamed, who was known to frequently butt heads with his partners, left to start a social-networking website aimed at the financial-services industry. Merlin executives, who have been talking to Mohamed about the new business for the past 18 months, may provide financial backing.

Merlin, which is based in San Francisco, was founded in 2004 by Mohamed, senior partner Charles Brama, chief executive Stephan Vermut, and Vermut's son, Aaron Vermut, the chief operating officer. Merlin isn't ranked among the major prime brokers — big banks such as Credit Suisse, Goldman Sachs and J.P. Morgan — but with more than 500 hedge fund clients, it dwarfs most of the so-called mini primes that launched in the wake of the financial crisis.

San Francisco-based Merlin provides hedge fund managers with a full complement of prime-brokerage services, including trade finance, portfolio management and risk analysis. A key to Merlin's success in winning market share has been the application of proprietary technology in each of those areas.

Stephan Vermut played down the impact of Mohamed's departure, noting that 25 of the firm's 100 employees are focused on technology. He said the firm has identified a replacement for Mohamed but isn't ready to make an announcement.

Before starting Merlin, Mohamed held a senior technology position at Bank of America's prime-brokerage unit, where he developed portfolio-management and risk-reporting systems.

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